Minimum wage pinches budgets

The newly elected Congress is looking to raise the minimum wage to $7.25 per hour.

Lee VandenBusch

The long-standing federal minimum wage, set at $5.15 an hour almost 10 years ago, may be in line for an upgrade.

Among the many changes suggested by the newly-elected Democratic Congress is a proposal to bump the federal minimum wage to $7.25 in the hopes of helping workers throughout the country.

In Minnesota, the minimum wage is $6.15 an hour.

For working college students here in Minnesota, the help is more than welcome.

Katy Theisen, a strategic communications junior, said more money “would definitely help.”

Theisen, who is currently a waitress at the Dinkytown Burrito Loco, said even though she doesn’t like her job, it’s necessary.

“Extra money would be really great,” Theisen said. “It’s really hard sometimes to pay bills.”

Theisen is one of many students who work at least part time to help pay for school. Many of those students also rely on loans.

In 2004, 54 percent of students receiving a bachelor’s degree in the United States had some kind of loan debt. The median value of that debt was $14,671 at public universities, according to the American Council on Education.

Theisen says she relies on loans to pay rent and bills. She said with what she makes at her job, she would not be able to afford everything alone.

“The minimum wage is not really enough to live on,” Theisen said.

Elizabeth Davis, an applied economics associate professor, said the current federal minimum wage isn’t adequate.

“If you work full-time, year-round at the minimum wage, you earn just over $10,000,” Davis said. “The federal poverty level for a family of three is just over $16,000.”

In Minnesota, where the state minimum wage is slightly higher, a full-time worker would earn $11,808. That’s almost $5,000 below the poverty level.

Beyond that, for most students, full-time work is out of the question.

Ben McKibben, a criminology and political science junior, is another student who works for minimum wage part-time while attending school. He also relies on loans to pay for living expenses.

“It would not be possible to work full-time and attend school,” McKibben said. “It’s one or the other; you can’t live under a bridge and go to school.”

McKibben said he’s had friends who tried to work full-time and attend school and all of them ended up dropping out.

“You really have to make a choice,” McKibben said.

People who work for minimum wage usually include young workers and people without college degrees, Davis said.

Theisen said working full-time as a student would be difficult.

“Kids in college can’t take on a more professional job because they have other obligations,” Theisen said. “It’s not really fair to us.”

Democratic Congressman-elect Keith Ellison, a long-time proponent of a minimum wage increase, said in a statement that no one who works full-time should make less than $11,000 a year.

“In America, there is a sort of social contract that says if you work hard and play by the rules, you can get ahead,” Ellison said. “Raising the minimum wage makes sense.”

Opponents of the increase argue that a higher minimum wage would hurt the economy, forcing employers to cut down on workers.

Jim Rosvold, president of the Stadium Village Commercial Association, said that an increased minimum wage would have other detrimental effects as well.

“Somewhere along the line you have to pass that added expense on,” he said. “You’ll end up paying more for things.”

Rosvold, who also runs Campus Pizza, argued that most people who make minimum wage in the area are servers, and they end up making more than minimum wage with tips.

“I’m not a big fan of minimum wage,” he said. “The market pays prevailing wages and it’s probably not necessary.”

The most recent attempt to raise the minimum wage was voted down by the Senate this summer. The increase called for a minimum wage of $7.15.

In the meantime, McKibben said any increase would help.

“I get no help from my parents,” McKibben said. “I pay for my school through loans, so I’m digging myself a nice hole of debt.”